Written by Cláudio Afonso | LinkedIn | X
In a research note on Sunday, Morgan Stanley analyst Tim Hsiao commented on Nio’s earlier announcement of a 3.3 billion yuan ($470 million) investment for its China subsidiary.
“We believe this new investment will resolve the company’s fundraising debate and enhance near-term cash flow,” Hsiao wrote.
Shares of the electric vehicle maker listed in Singapore surged more than 17 percent, while those traded in Hong Kong are up more than 21 percent at the time of writing.
“The investment from existing shareholders of Nio China should further enhance Nio’s balance sheet,” Morgan Stanley analyst added.
The People’s Bank of China (PBOC) has implemented several key measures to stimulate the economy and support liquidity, resulting in the best rally for Chinese stocks in nearly a decade.
On Monday, the Shanghai Composite Index jumped nearly 8 percent, while Hong Kong’s Hang Seng Index surged 3.45 percent.
On September 5, shortly after Nio‘s second quarter earnings results were reported, Morgan Stanley analyst Tim Hsiao reiterated an Overweight rating on the stock with a $6.10 price target.
In the second quarter, Nio saw its revenue increase 98.9 percent year over year mainly attributed to the 144 percent surge in vehicle deliveries.
Gross margin also improved to 9.7 percent, up from 1.0 percent a year ago and from 4.9 percent reported in the first quarter of the year.
Over the weekend, Nio started delivering the first model of its first sub-brand Onvo while the second one, from the new brand Firefly, will be unveiled in the first half of next year.
In December 2023, Nio received a $2.2 billion investment from CYVN Holdings, an Abu Dhabi-based investment company, which increased CYVN’s ownership to 20.1 percent of Nio’s total issued and outstanding shares.
The investment followed a $738.5 million investment made by CYVN in July 2023.
The EV maker will expand to the Middle East later this year. The first showroom will be located in the Galleria Al Maryah Island in Abu Dhabi and the first battery swap station next to the Yas Marina F1 Circuit.
Written by Cláudio Afonso | LinkedIn | X
